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In a developing economy like Ghana, the contribution of small firms to the employment of the
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seems negligible. The reason is that some of the firms do not manage their working capital as
expected and this has affected the viability of their businesses. The study revealed that the
operators of small firms possess limited formal education, weak managerial and financial
management skills within the sector. They also lack qualified accounting staff and suitable
accounting software which are motivators to effective working capital management practices.
Owners/managers were found to act as barriers to efficient usage of working capital
management practices. Recommendations on credit control and collection policies, the
importance of the use of computer spreadsheets, training and education which the study found
to be problems with the sample small firms have been suggested to the owners/managers.
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